National carrier Kenya Airways (KQ) is seeking a West African partner airline to join its two-member pact with South African Airways (SAA).
The two loss-making carriers in November last year signed a strategic partnership framework in South Africa in a move that will see them eventually form a Pan-African carrier next year.
“The intention is to invite a West African airline at some point in the future to also join. We will have a three-hub strategy of Nairobi, Johannesburg, and the West African hub to create better opportunities and services for our customers,” said KQ Board chairman Michael Joseph in an investor briefing on Tuesday.
Mr Joseph said KQ and SAA will form a holding company under which KQ and SAA will continue to operate separately under their brand names and maintain their routes. “The shareholders of the holding company will be strategic investors and individual governments that wish to retain their share,” he said.
The holding firm will help the carriers with services such as catering, maintenance, and financing. “Our idea is to lower the overall cost of flying to attract more passengers across Africa,” Mr Joseph said.
The two airlines plan to consolidate their assets and form a Pan-African airline following the meeting between President Uhuru Kenyatta and his South African counterpart Cyril Ramaphosa last year.
KQ Chief Executive Allan Kilavuka said the airlines under the pact will synchronise their schedules and networks and synergise common costs.
“We are looking at a group organisation sitting at the top of various anchor companies and then the two airlines continue to fly as separate entities but synergise schedules and some of the costs that are common among the group so that we reduce the unit cost,” he said.
Mr Kilavuka said the cash-strapped airlines will use the lower operational costs arising from the partnership to enable them to offer their services at a lower cost and attract more passengers.
The KQ boss is predicting the struggling airline to break even by 2024. This is after the firm recorded a 56 per cent drop in its net loss to Sh15.8 billion, a significant improvement from the record Sh36.2 billion net loss it recorded in 2020 on the back of global travel restrictions owing to the outbreak of Covid-19.
KQ is also betting on new technology such as drones, flying cars, and expansion of its cargo business to boost future earnings.
